Supreme Court Strikes Down IEEPA Tariffs: Breaking Down the 6-3 Ruling
The Supreme Court ruled 6-3 that IEEPA tariffs are unconstitutional. Here's what changed, what didn't, and what Amazon FBA sellers importing products should do next.
Update (September 2026): President Trump proclaimed a 10% global tariff under Section 122 of the Trade Act of 1974 hours after the ruling. A rise to the 15% statutory maximum was announced but never enacted, so the rate stayed at 10%. It applied to goods entered from February 24, 2026 and expired after 150 days on July 24, 2026, replaced the same minute by Section 301 forced labor duties of 10 or 12.5 percent across 60 economies. The analysis below still applies to the underlying legal shift.
For a deeper analysis of the ruling's consequences, including country-by-country winners and losers, the $175 billion refund question, and the 150-day expiration cliff, see our full breakdown.
On February 20, 2026, the Supreme Court ruled 6-3 that the International Emergency Economic Powers Act (IEEPA) does not authorize the president to impose tariffs. Chief Justice Roberts wrote the majority opinion, joined by Justices Gorsuch, Barrett, and the three liberal justices.
This is the biggest shift in US trade policy since Liberation Day itself. And if you import products for Amazon FBA, it changes your cost structure right now.
Here's what actually happened, what it means for your landed costs, and what to do about it.
What got struck down
The ruling invalidates every tariff that was imposed using IEEPA as the legal authority. That includes two major categories:
The "reciprocal" tariffs from Liberation Day, which put a 10% baseline on imports from virtually every country in the world (with rates as high as 34% or more for China).
The "fentanyl" tariffs, which added 25% on goods from Canada, Mexico, and China, justified by the administration as a response to drug trafficking.
These IEEPA tariffs accounted for roughly 60% of all tariff revenue collected since early 2025. About $130 billion.
What's still in place
Not all tariffs were challenged in this case. The following remain completely unaffected:
Section 301 tariffs on China. These target unfair trade practices like forced technology transfer and intellectual property theft. Rates range from 7.5% to 100% depending on the product category and HTS code. They've been in place since 2018 and were expanded under both administrations. These are the tariffs that hit most Amazon FBA products sourced from China.
Section 232 tariffs. These cover specific materials on national security grounds: steel (50%), aluminum (50%), automobiles (25%), copper (50%), and lumber products. If your product falls under these categories, nothing changed.
MFN duty rates. Your base duty rate (the one determined by your HS code) is set by Congress through the Harmonized Tariff Schedule. These are unchanged.
How this changes your landed cost
The impact depends entirely on where you source from.
If you import from China, the IEEPA reciprocal tariff layer is gone, but Section 301 still applies. Before the ruling, a typical product might have faced MFN duty + Section 301 + IEEPA reciprocal. Now it's MFN duty + Section 301. That's meaningful, but Section 301 was always the heavier layer for China-sourced goods.
If you import from Vietnam, India, or other non-China countries, the impact could be much bigger. These countries were never subject to Section 301 tariffs. The IEEPA reciprocal tariff (10% minimum) was often the only additional duty layer on top of the base MFN rate. With it gone, your total duty burden might have just dropped to the MFN rate alone.
We wrote a full breakdown of how these duty layers stack if you want to understand the mechanics.
To see the impact on your specific product, run your numbers through the cost calculator with your HS code and origin country.
The catch: this might be temporary
The administration moved within hours. Trump issued Proclamation 11012 imposing a new global tariff under Section 122 of the Trade Act of 1974 at 10%, on top of all existing tariffs. A rise to the 15% statutory maximum was announced the next day but never enacted. He also announced new Section 301 investigations targeting unfair trade practices, which could produce additional tariffs down the road.
Section 122 was a stopgap. It expired after 150 days, on July 24, 2026, and Congress did not extend it. Section 301 investigations historically take 9+ months to complete, so the open question at the time was whether replacement tariffs would be ready in time. They were: the Section 301 forced labor duties took effect the same minute Section 122 lapsed.
For China specifically, the two IEEPA tariff layers were replaced by the 10% Section 122 global tariff, bringing the total rate down from higher levels before the ruling. For most other countries, the 10% Section 122 rate matched the IEEPA baseline. Since July 24, 2026 the layer in that slot is the Section 301 forced labor duty, at 12.5% for China.
The refund question
About $130 billion was collected under IEEPA tariffs that have now been ruled illegal. The government previously conceded on the record that refunds with interest would be owed if the tariffs were struck down. Hundreds of importers filed protective lawsuits at the Court of International Trade last year to preserve their refund rights.
The Supreme Court didn't directly address refund procedures, so the mechanics are still unclear. If you've been paying IEEPA duties, talk to your customs broker about your options now. Don't wait for the process to be formalized.
What to do right now
Recalculate your landed costs. If you've been using a static duty rate assumption, it's wrong as of today. Run your full cost waterfall with current rates.
Review your pricing. If your landed cost just dropped meaningfully (especially for non-China sourcing), you have a window to either improve margins or lower prices to compete.
Talk to your customs broker about refunds. If you imported under IEEPA tariffs, you may be entitled to refunds with interest. The earlier you start documenting, the better positioned you'll be.
Don't assume the lower rates are permanent. The administration will use other authorities to reimpose tariffs. Build scenarios for what your costs look like if rates snap back, and make sure your pricing can absorb it.
This is exactly the kind of volatility that makes static margin calculations dangerous. Tariff rates are not fixed. They change based on executive orders, court rulings, trade deals, and congressional action. The sellers who track their true landed costs, layer by layer, are the ones who can adapt when the ground shifts. Everyone else finds out when their margins disappear.